Tag Archives: outlook
Confidence in UK housing market continues, latest sentiment index shows
Households in the UK perceived that the value of their home rose in June and are more confident that they will continue on an upward trend, the latest house price sentiment index shows. Some 23.7% of the 1,500 households surveyed across the UK said that the value of their home had risen over the last month, while 4.6% reported a fall, according to the index from real estate firm Knight Frank and Markit Economics. This resulted in an HPSI a reading of 59.5, the twenty seventh consecutive month that the reading has been above 50. June’s reading is an increase on the 58 recorded in May and is the highest the index has been since October 2014, indicating that households believe that any uncertainty caused by the General Election has passed. The future HPSI, which measures what households think will happen to the value of their property over the next year, rose in June to 70.5, up from 70 in May and the index report also shows that households are now more confident that the value of their home will rise in the next 12 months than at any time since December last year. ‘Households’ expectations for house price rises have reached the highest level this year as the results of the General Election provide some clarity on the outlook for the housing market and household finances,’ said Grainne Gilmore, head of UK residential research at Knight Frank. ‘Interest rates remain advantageous, with mortgage rates hitting record lows for those who can clinch a new deal. However the future house price index still remains below levels seen last year as constrained mortgage lending and affordability affect the market,’ she added. According to Chris Williamson, chief economist at Markit, house price growth looks set to revive again after what appears to have been a lull due to the general election. ‘The resumption of political stability is clearly good for the housing market. At the same time, survey data shows that low inflation has meant home owners have pushed back their expectations of when interest rates will start rising, adding fuel to the bullish view on house prices,’ he explained. ‘Notable exceptions are Scotland and Wales, where devolution uncertainty seems to have led to marked falls in views on future prices in June following the election,’ he added. The index also found that some 6.6% of UK households said they planned to buy a property in the next 12 months, up from 6.4% in May. Individuals aged between 25 and 34 are the most likely to be considering buying a home in the short term, with 9.2% of such respondents saying they planned to purchase a home within the next 12 months, followed by those aged 35 to 44 at 9%. Continue reading
Latest UK house price index shows a slowing of growth in the market
UK house prices in the three months to May were 2% higher than in the preceding three months but they fell 0.1% month on month, according to the latest index figures. The annual growth compared to May last year is 8.6%, taking the average price of a home to £196,067, the monthly index report from lender The Halifax shows. And an analysis of the data shows that the quarterly measure of the underlying rate of house price growth has eased for the second consecutive month, falling to its lowest since January. On top of this annual house price growth only increased marginally from the 8.5% recorded in April and continues to be in the narrow range of 8% to 9% where it has been throughout 2015 so far. ‘Housing supply remains extremely tight with the stock of properties available for sale currently at its lowest level for many years,’ said Martin Ellis, Halifax housing economist. ‘At the same time, ongoing economic recovery, increasing employment, real earnings growth and very low mortgage rates are all supporting housing demand. This combination has kept annual house price inflation well above earnings growth although activity levels are subdued,’ he pointed out. ‘The imbalance between supply and demand is likely to continue to push up house prices over the coming months. Looking further ahead, the increasing level of house prices in relation to earnings is expected to dampen house price growth,’ he added. The report also points out that figures from HMRC show that home sales fell by 3.4% between March and April to 97,020. Nonetheless, sales in the three months from February to April were marginally higher, up 1.3%, than in the preceding three months. Mortgage approvals continue to pick-up. The volume of mortgage approvals for house purchases, a leading indicator of completed house sales, increased by 9.9% in April. Whilst approvals in the three months to April were 6.6% higher than in the preceding three months, they were 4.3% lower than in the same three months a year ago, according to the latest available Bank of England, seasonally adjusted figures. And supply remains tight. The stock of homes available for sale fell further in April and is currently at its lowest level for many years. New instructions declined in April for the eighth month in the last nine, contributing to the very low levels of supply, data from the Royal Institution of Chartered Surveyors shows. But there has been an increase in those thinking it is a good time to buy. The latest Halifax Housing Market Confidence Tracker shows that the net proportion of consumers who believe the next 12 months will be a good time to buy increased from +21 in March to +26 in April. In contrast, the net proportion that thinks that the next year will be a good time to sell fell from +33 to +30. The headline House Price Outlook balance, i.e. the difference between the proportion of people across Britain that… Continue reading
UK house price expectations remains positive, latest index suggests
House price expectations in the UK remain positive, but signs of a post-election bounce are largely confined to London, according to the latest property sentiment index. Some 20.2% of the 1,500 households surveyed across the UK for the Knight Frank and Markit Economics house price sentiment index said that the value of their home had risen over the last month, while 4.1% reported a fall. This gave the HPSI a reading of 58, the twenty-sixth consecutive month that the reading has been above 50. But it was a slight decrease on last month’s reading of 58.2, indicating that households may have factored in the uncertainty caused by the general election to perceived price growth. ‘There is little evidence yet of an election bounce in house price expectations, reflecting current market conditions. Activity is certainly picking up following the election of a majority government, and the certainty this has provided in the housing market,’ said Grainne Gilmore, head of UK residential research at Knight Frank. Demand is rising, but an increasing number of vendors are putting their homes on the market, and this is set to create more balance in terms of pricing. Londoners expectations for future price rises reached their highest level since November last year, perhaps reflecting the increased certainty in the outlook for property taxes in the capital,’ she added. The future HPSI, which measures what households think will happen to the value of their property over the next year, fell in May to 70, slightly down from 70.2 in April. In spite of the monthly decline, the proportion of households expecting prices to fall over the next 12 months at 5.2% was the lowest ever recorded since the survey began in 2009. Meanwhile, 45.1% anticipate a rise in the value of their property and 49.7% forecast no change over the year ahead. Households in the East of England at 77.8 were most confident about price rises, followed by those in London at 77.7 and the South East at 73.5. The data also shows that some 6.4% of UK households said they planned to buy a property in the next 12 months, down from 6.5% a year previously. On a regional basis, nearly one in 10 households in the North East is planning a purchase in the next 12 months, followed by those living in London where 8.4% of households said they would be buying a property in 2015. ‘May’s survey highlights positive house price expectations across the UK, although households are still much less bullish than was seen at the post-recession peak exactly one year ago,’ said Tim Moore, senior economist at Markit. ‘Tighter lending criteria and stretched affordability continue to restrain house price sentiment, while improving labour market conditions and continued low mortgage rates remain two key drivers of positive property price trends,’ he explained. ‘The most likely area of the property market to experience an appreciable post-election bounce is the house building sector, as decision making should reaccelerate after several months… Continue reading
